How did the funds investments in fixed income securities affect performance?
To review, the fixed income portion of the portfolio is invested entirely in Treasury STRIPS, which are securities representing the principal payment of a Treasury security that has been “stripped” of its semiannual income component. In other words, the final payment of the bond — the return of principal — is the only payment investors receive. Such securities initially sell at a discount to their final value, and their prices gradually rise until they become fully valued at par ($1000 per bond) on their maturity date. Because STRIPS are more responsive to interest rate changes than coupon-bearing bonds of similar maturity, they tend to be more sensitive to overall market volatility. This is particularly true for longer-maturity STRIPS. As the maturity dates draws closer, the dominant contribution to price performance is the gradual appreciation of the bonds to par value. DWS Target 2014 Fund is scheduled to mature on November 15, 2014. Overall, the performance of the fixed income port
